Bank Leumi (TASE: LUMI), headed by Hanan Friedman, posted a net profit of NIS 2.6 billion for the second quarter, 15% higher than in the corresponding quarter of 2024. Following Supervisor of Banks Daniel Hahiashvili’s decision earlier this week to allow the banks to distribute 50% of their profits, for the time being for the second quarter only, Bank Leumi’s board of directors has declared a dividend of NIS 979 million in cash and NIS 326 million in the form of repurchases of the bank’s shares, giving a total of NIS 1.3 billion.
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Bank Leumi’s return on equity in the second quarter was an annualized 16.2%, slightly better than the 15.9% recorded in the corresponding quarter. Provisions for credit losses increased to NIS 232 million, which compares with income on this item (net recoveries) of NIS 18 million in the corresponding quarter.
The bank said that activity in the Israeli economy continued to expand in the first half of this year, and it sees further recovery in the second half, the pace of which will depend on security developments among other things. Nevertheless, it states: “The estimate of the group provision for credit losses continues to reflect the security and economic uncertainty, and conservatism in the macro-economic indicators and criteria used to guide the model for predicting the rate of future customer failures.”
Bank Leumi’s net interest income grew by 3.7% in the second quarter, to NIS 4.54 billion. For the first half year, growth was 5.1%, to NIS 8.56 billion. The bank says that the growth stems mainly from growth in the credit portfolio, by 12.8% year-on-year to NIS 489 billion, partly offset by erosion of interest rate spreads.
Customer fees totaled NIS 1 billion in the second quarter, up 11% year on-year, largely thanks to commissions on securities transactions, which rose 33% year-on-year to NIS 198 million, as the local stock market boomed.
The bank, the largest in Israel in market cap terms, achieved an excellent efficiency ratio of 26.9% (the lower the figure the better) versus 28.7% in the corresponding quarter. The ratio is low not only for the local market, but by global comparison as well. In retail banking, the ratio is generally over 30%. In 2020, Bank Leumi’s efficiency ratio was 53.8%, and 46.8% in the following year. The current ratio is a result of high profitability, thanks to high interest rates, alongside streamlining measures, such as branch closures, and an emphasis on digital banking.
Published by Globes, Israel business news – en.globes.co.il – on August 13, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
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